O’CONNOR’S SCOTTISH LEGACY
In 2008, Eddie O’Connor grossed c.€50m from the sale of Airtricity and set about establishing Mainstream Renewable Power to develop wind farm and solar PV renewable power, mostly in Chile and South Africa and also offshore UK.
The Mainstream business model is mostly build and flip. According to O’Connor, each megawatt of renewable power costs €1m to build, and in the 2013 to 2017 period, Mainstream won 2,300MW in renewable rollout contracts all over the world.
“That 2.3GW is €2.3 billion you have to find,” he related a few years ago. “Three-quarters of that is senior debt from banks but then there’s a whole big tranche of equity you have to find as well. That equity is the challenging bit.”
Mainstream’s most successful development has been the 450MW offshore wind farm called Neart na Gaoithe (‘Strength of Wind’) in the Forth and Tay estuaries in east Scotland. This was nearly killed at birth due to opposition from the Royal Society for the Protection of Birds, established as the Plumage League in 1889. The organisation has 1,500 staff and 18,750 volunteers.
The Society objects to wind turbines because they’re a hazard to seabirds such as gannets.
Their objections were entertained at various levels of Scotland’s political and judicial process before being finally rejected by the UK Supreme Court in November 2017.
In May 2018, Mainstream sold Neart na Gaoithe to French power company EDF Renewables. Energy from the wind farm will be the equivalent of the annual electricity provision to 375,000 homes. The total investment required to deliver the project is around €2.1bn and commissioning is planned for 2023.
As part of the transaction, Aker Horizons also acquired an interest in SuperNode, a superconductor technology company established by O’Connor. In his book, O’Connor explains why current electricity transmission infrastructure isn’t up to the job of shunting wind power around Europe. SuperNode is aimed at solving that problem, and the Mainstream founder will have more time now to explore the idea.
O’Connor knows a lot about electricity and he devotes a chapter to explaining why electricity is so scarce across the African continent. He notes that 600 million people in Africa have no access to electricity, and this disturbs him. For years O’Connor has been calling for a Marshall Plan-type aid plan for Africa, not only because it’s a moral imperative but also out of Europe’s self-interest as population and migration keep increasing.
The former Mainstream boss points to the causal relationship between electricity consumption and economic growth, citing Ireland as an example. “Due to low levels of electrification, African entrepreneurs are disenfranchised,” O’Connor writes. “Until they are empowered by having sufficient electricity, there will be no growth in the economies. The small to medium enterprise is the foundation of all wealth creation and it is choked at birth in sub-Saharan Africa, due to lack of electricity.”
O’Connor argues that African states haven’t embraced electrification due to poor governance as a result of European colonialism. He notes that there are an estimated 3,000 ethnic groups in Africa with about 2,000 different languages.
“The colonial powers imposed artificial states on predominantly scattered tribal societies,” O’Connor writes. “Organic nation building has not happened in sub-Saharan Africa at least in part, due to colonial interference. Instead of the gradual evolution of states as occurred elsewhere, what we have today is the imposition of statehood on top of artificially conjoined ethnic groupings, generally leading to conflicting loyalties and weak state capacity.
“This is arguably the main reason why Africa is not progressing and why it has not been electrified to any meaningful extent. We should address this situation in an innovative fashion, because state capacity is key to Africa’s future – and to ours.”
In his autobiography Eddie O’Connor doesn’t pull back from plain speaking, not just about Africa but on a range of topics and people. After the Dialogues backlash, it would have been gratifying had he argued his case in the public realm. However, the Airtricity and Mainstream stories weren’t without major financial bumps in the road, and O’Connor is keenly aware that business is business.